Posted
by
ScuttleMonkey
on Monday October 08, 2007 @04:53PM
from the money-can-soothe-a-lot-of-hurt-feelings dept.

mytrip writes to tell us that Vonage has been able to settle their patent differences with Sprint-Nextel for a mere $80 million. This settlement resolves all pending claims by Sprint-Nextel as well as licensing Vonage to use over 100 patents and a $5 million advance in prepayment for services.

I seriously doubt that. As much as I'd like to believe that the federal government may be coming to some sense regarding patent decisions, I can't help but believe that that will change - and for the worse.

Really, I think any present break in the insanity is merely the eye of the storm, if you will. From here it will probably just go back to how things used to be.

Many times your cell is useless in the home. At least one other cell company has already fielded a product where when you put the phone on the cradle, all extensions go through that cell. Next could instead be a system where when you put the cell down on the dock, the extensions go through it AND the calls then go from the cell to the IP-based system to save you battery use on the wireless transmissions, or if the base had a stand-by charger in it as well, at least offload their cell systems from calls taking place at home.

Then, I get to use my Sprint phone over Vonage at home, and over Sprint cellular when I take it with me. Put multiple docks in and have them have a nice little menu system to choose the phone to go through (in case three family members are home and have docked their phones). I can call out through my wife's if mine is already being used by something else dialing out.

Vonage could be a foot in the door to VoIP linkage to Sprint's system. Might seem a longshot, but there's been longer shots before...

Except all the notable changes lately have been in the courts. Especially the Supreme Court, where the Justices have been dropping strong hints that they are willing to overturn a lot of the patent craziness that's been going on for the past 10 - 15 years or so.

They are a reseller of an existing service - access to the telephone network. They do not provide anything on their own. No service, no infrastructure, no protocol on an existing infrastructure. Instead they are using the infrastructure that exists because of the telephone carriers as a club to beat them to death. Interestingly enough, if Vonage ever really succeeds and Sprint or Verizon shuts their doors, Vonage loses.

An exact parallel to this would be delivering IP video to cable customers through their cable modem. You buy a little box which takes the video data stream and outputs a video signal. Then the cable customer could drop television service in favor of this new service. Except in order to get the video programming the provider is a cable subscriber. So the cable company would get to be both the network and the wholesaler of the programming. Since the programming would be almost free (1 cable subscriber bill) it should make tons of money, right?

If the above seems like a clever idea to you, I've got another one. Have a little cart from which you sell hamburgers. You can take the cart around to people on the street so they don't have to drive or walk as far. In order to get these hamburgers you just work out a bulk purchase plan from McDonalds and resell them from your little cart. The idea would be to get McDonalds to agree to a such a low price that you could make money on this.

How long do you think such buy-bulk-services-for-resale schemes can go on? Sooner or later if you treat your supplier as a competitor your supplier is either (a) going to shut down or (b) shut your service off. Either is death to the buy-in-bulk reseller.

Sure, you can say that the infrastructure (or the hamburgers) should be public and any retailer should be able to use this infrastructure to compete with each other. That's fine now that it exists. But in order to get that first hamburger (or telephone switch) it was necessary to make a risky investment. Governments are not in the business of making risky investments. They either invest in sure things or they line up someone else to get the privilege of making the investment. We wouldn't have the phone system we have today if it was up to the government in 1900 to build it. They would have waited until 1950 to do it and then where do you think the US would be?

I have T-Mobile@Home. It's an add-on to my T-mobile service whereby my phone (Blackberry Curve) uses my 802.11b/g access point at home to route my calls instead of a cell tower. The phone will actually use any Wi-Fi access point I have access to (home, work, Starbucks). In return for taking my call off of the cellular network, T-Mobile doesn't charge me for the call (doesn't come out of my minutes) when it rides the public net.

I don't work for T-Mobile, I've just been a very satisfied customer for the last 5 years.